Wide-open spaces and self-reliance are more attractive in the pandemic-era. Here are six things you should know about buying a hobby farm.
An interesting thing has happened to me on TikTok recently. I’ve seen a huge uptick in homebuyers who don’t just want to buy a house – they want several acres and a farm.
What’s driving the trend toward buying a hobby farm? I think it’s a desire for freedom and a chance to make their own rules.
People on TikTok tend to be free thinkers, entrepreneurs, and freedom seekers. They’re drawn to TikTok because of the authentic, down to earth nature of the platform, and that sensibility drives them to want their own space as well. They’re not interested in HOAs or small parcels of land. They want a homestead where they can live on their own terms.
And I totally get it. My family and I live on a hobby farm ourselves, complete with chickens and 40 acres.
Owning a hobby farm is fantastic for a lot of reasons. But it’s also different from what most people do, and it helps to know what you’re in for before you buy a farm. Because there are a lot of steps between wanting to live in the country and actually living in the country.
So, here’s what you need to know about buying a hobby farm, from someone who has done it.
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Internet connection is not guaranteed on a hobby farm
The first thing I need to know is whether you need internet access. If you tell me, I want 40 acres and I need internet, I can help you find that. But it’s going to cost you a lot more than if you want 40 acres and the internet is non-essential.
It may seem hard to believe, but there are a lot of rural areas that have limited or unreliable internet access due to a lack of infrastructure. Many people I meet don’t know that there are still places on Earth where they can’t pick up their phone and make it work.
I feel for them. I had a similar shock when we moved to our home outside Richmond, Va., several years ago. When I asked my husband when we could get the internet hooked up, he informed me that we don’t.
There are no options for broadband connections where we live, so we get by with hotspots and satellite dishes. Some days our set-up works better than others, so if we have an important call or virtual event, we plan to do it at our offices in town to be on the safe side.
That works for us because we work out of the home, so we’re not reliant on having a steady connection at the house. But if you work from home and you need to be online all day, you’ll probably need a property that feels rural but is relatively close to a big town or small city. That kind of “best of both worlds” property is out there, it’s just more expensive.
If internet is not a must-have, you’ll have more options and can move to more remote areas where houses and land are a little less costly.
Owning a hobby farm is amazing for so many reasons. The privacy, the space, the autonomy, the nature – it’s all wonderful. But one thing it’s not is convenient.
If you don’t want to drive 20 minutes to the grocery store, you’re not going to want to live where I live. If you’re not OK with driving 30 minutes to the mall, a hobby farm might not be optimal for you. Everything is a bit of a hike, including grocery stores, coffee shops, and all the other amenities you get nearby when you live in a suburb or city.
Keep in mind that you’re not necessarily trading convenience for a life free of a homeowners association (HOA). Despite living far enough from a city to not have internet, our house is still under an HOA. It’s not especially strict, since all the homes are set fairly far apart from one another. But we still have to abide by the rules nonetheless.
So if you really want to escape the possibility of an HOA or neighborhood governance covenants, you’ll have to move even farther out – and farther away from standard amenities.
There are two ways to go about setting up your hobby farm. One is to purchase land and build on it. The other is to buy a house that sits on a certain amount of land.
If you buy the land and build, you’ll need to clear a few hurdles. Before you even purchase the property, you’ll have to find out whether the land has been approved for building. In Virginia, this is known as being “perked.”
If a property has been perked, that means a surveyor has already assessed the land and determined how large a home could be built on it, with a certain number of bedrooms, bathrooms, and living areas.
If the property has not been perked, you have to pay to have this assessment done before you can buy and start building.
In addition to getting the land perked, obtaining building permits, and finding a builder who can do what you want, you also have to account for your utilities. Your municipality will have certain requirements for establishing hook-ups for water access, sewage, electricity, and gas.
But getting on the grid doesn’t necessarily entitle you to all municipal services. Case in point: Where I live, we don’t have garbage and recycling collection. We have to load our waste and recycling into a truck and take it to the dump ourselves.
That’s certainly not a dealbreaker, especially if you want a more rural home. But it is worth noting that you have to be a lot more hands-on than someone who buys a house in a traditional neighborhood with full access to municipal services.
Buying an existing house is much easier than purchasing land and having a brand new one built. But you still want to familiarize yourself with the property, especially in light of how you plan to use it.
Here are some things to think about before you buy a hobby farm:
- If you plan to keep animals on the property, are there existing barns and shelters or do you have to build them?
- Is the land already cleared to grow crops or is it mostly wooded?
- If you plan to hunt on the property, what are the local laws and permit requirements?
- Can you easily navigate the property on foot, or will you need to clear paths or buy a vehicle to get around on it?
- How will you maintain the property? Do you need to buy a riding mower or will you hire a company to manage the land for you?
All of these questions can help you assess whether a particular property is right for you, and how much money you’ll need to spend to make it viable.
If you buy a property with no HOA or local restrictions, you may be able to raise horses, cows, goats, pigs, and chickens to your heart’s content.
But some areas will restrict the types of animals you can keep. My HOA allows us to have chickens, goats, and horses, but not cows. That was fine for my family, but if you want to keep a certain type of livestock, make sure you know the local regulations before you buy.
A few other animal-related questions to consider for your hobby farm:
- How will you water the animals?
- Where will they sleep?
- How will you feed them?
- Is there an existing fence or will you need to build one?
- What types of predators are in the area and how can you protect your animals?
When you’re looking at a property, keep an eye out for water access near where you’ll keep the animals. Is there a hose hook-up nearby, or will you need to set that up? Look, too, at the condition of any barns or stables to see if they are ready for use or if they’ll need repairs before you can safely keep your animals there.
The hobby farm you want to buy will dictate the type of loan you can use (and vice versa)
There are a number of mortgage loan programs out there, but they each have distinct criteria for the types of homes you can buy with them.
USDA loans, for instance, are great for rural and suburban areas because they have a 0% down payment option. But the property cannot be used for income-producing purposes, so you wouldn’t be able to buy a home that you intend to live in plus turn into a business.
Other programs may restrict the amount of acreage you’re able to buy.
Tell your real estate agent and your mortgage lender your intentions for the home upfront so they can help you choose the right loan and the right property for your goals.
There’s a lot of nuance to buying a hobby farm property, including the local laws and tax guidelines. Some properties may be tax exempt* based on how it’s used or whether the homeowner has qualifying factors. It’s a lot to learn on your own, which is why I recommend working with a real estate agent who has some insight into the hobby farm process.
Before I bought my current house, I had never purchased land or owned this type of property. But I had worked with clients who had done it, so I was familiar with some of the complexities.
Ask your real estate agent whether they have helped clients buy hobby farms in the past, or at least whether someone on their team has. You want to have a go-to person who can answer the many questions you’ll have on the way to buying your home and hobby farm.
USDA Guaranteed Rural Housing loans subject to USDA-specific requirements and applicable state income and property limits. Fairway is not affiliated with any government agencies. These materials are not from USDA or RD and were not approved by USDA or RD or any other government agency.
*This article does not constitute tax advice. Please consult a tax advisor regarding your specific situation. This article does not constitute as specific property tax advice. Please consult a tax attorney or your local tax accessor's office regarding your specific situation.